Advent acquires Eureka Forbes for ₹4,400 crore - Business2Business

Mumbai: American buyout firm Advent International has agreed to buy a majority stake in Eureka Forbes Ltd, the consumer company durable flagship of the Shapoorji Pallonji Group and a household name in the vacuum cleaner and water purifier segments, for â‚¹4,400 crore.

The two companies said in a joint statement on Sunday that Eureka Forbes Limited, a unit of Forbes & Co. Ltd., will separate from the parent company and will be listed on BSE.

" Upon listing of Eureka Forbes, Advent will purchase up to 72.56% of the shares of the then existing company on a fully diluted basis from Shapoorji Pallonji Group. Thereafter, Advent will make an open offer in accordance with the applicable regulations ".

The deal will help Shapoorji Pallonji Group pare its debts and focus on other businesses. Of the group's total debt of Rs 20,000 crore, Rs 10,900 crore is under a one-time restructuring package under the Reserve Bank of India's COVID-19 relief framework regulations, giving the 150-year-old conglomerate terms of easier payment terms to clear the dues.

SP Group proposed to raise ₹ 10,332 crore by monetizing these assets. It is also trying to sell other group companies, such as Sterling and Wilson Solar, one of the largest providers of EPC (engineering, procurement and construction) solar solutions, and Afcons Infrastructure, a construction and engineering company.

Standard Chartered Bank advised the SP Group on the Eureka Forbes transaction.

"Having delivered innovative products and solutions for our ever-growing customer base, we are buoyant about the opportunity to unlock further growth and are excited to embark on this new journey with the promise of a better tomorrow," said Marzen R. Shroff,  managing director and chief executive of Eureka Forbes.

Eureka Forbes has a customer base of 20 million customers and is present in 450 cities and towns in India. The company sells its products through a multi-channel network, which includes direct sales, 20,000 points of sale and an e-commerce channel. In addition, it has a global footprint in 53 countries.

"We are excited to partner with the Eureka Forbes management team and apply Advent's Value creation playbook to build a champion of homegrown consumer durables in India, who will continue to be known for their innovative products and the best-in-class customer service, "said Sahel Dalal, Managing Director of Advent India PE Advisors Pvt. Limited.

Private equity firm Warburg Pincus and Swedish home appliance maker Electrolux were also in the race to acquire Eureka Forbes.

Advent has been investing in India since 2007 and has invested $ 2.2 billion in 16 companies in consumer products, financial services, healthcare, industrial and technology industries.

Eureka Forbes will be Advent's fifth acquisition in the Indian consumer segment. The other four are Crompton Greaves Consumer Electricals (a consumer electrical goods company), Dixcy Textiles (men’s innerwear brand), Enamor (a women's innerwear brand) and DFM Foods (producer of packaged savoury snacks).

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